Pabbatti Company,which Has Only One Product,has Provided the Following Data

question 13

Essay

Pabbatti Company,which has only one product,has provided the following data concerning its most recent month of operations:
$\begin{array}{|l|r|}\hline \text { Selling price } & \$ 112 \\\hline \text { Units in beginning inventory } & 500 \\\hline \text { Units produced } & 2,800 \\\hline \text { Units sold } & 2,900 \\\hline \text { Units in ending inventory } & 400\\\hline \text { Variable costs per unit: } & \\\hline \text { Direct materials } & \$ 37 \\\hline \text { Direct labour } & \$ 19 \\\hline \text { Variable manufacturing overhead } & \$ 7 \\\hline \text { Variable selling and administrative } & \$ 5 \\\hline \text { Fixed costs: } & \$ 109,200 \\\hline \text { Fixed manufacturing overhead } & \$ 5,800\\\hline\end{array}$

The company produces the same number of units every month,although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month.
Required:
a)What is the unit product cost for the month under variable costing?
b)Prepare an income statement for the month using the contribution format and the variable costing method.
c)Without preparing an income statement,determine the absorption costing operating income for the month.(Hint: Use the reconciliation method.)

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Definitions:

Undue Burden

A legal concept referring to an obligation or requirement that is excessively onerous or difficult to undertake.

At-Will Employee

An employment arrangement in which an employee can be dismissed by an employer for any reason (that is not illegal) without warning, as long as the reason is not discriminatory.

State Constitution

The fundamental legal document that outlines the structure, functions, and principles of government at the state level in the United States.

Title VII

Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion.